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While some of the most active members of the Bitcoin (BTC) and Ethereum (ETH) communities never stop fighting for technology and money, among other things (including memes), these two blockchain-powered networks can still coexist. , according to the Bitcoin 2021 conference. participants talking to Cryptonews.com. And decentralized finance (DeFi) could play a role here.
The conference, held earlier this month in Miami, USA, proved to be a major event, with thousands of people in attendance as well as a number of renowned speakers both inside and outside the Cryptosphere.
Among the questions discussed between some of the industry experts and Cryptonews.com was the turbulent dynamics of Bitcoin-Ethereum.
But the two are not necessarily as intertwined as some may think, rather they exist in parallel with each other.
“Comparing ETH and BTC directly is like comparing apples to oranges,” according to Zeeshan Feroz, director of growth for the company of MoonPay crypto payments .
In the opinion of Matthew Gundrum, marketing director of the payroll service of Bitwage cryptocurrencies , “people don’t realize that ETH and BTC are trying to do two separate things and therefore can coexist.”
Both networks have seen “dramatic adoption” in 2021 so far, which “will not show a slowdown in the next decade,” despite occasional setbacks along the way, he said.
Meanwhile, William Zielke, director of marketing for the cryptocurrency payments provider BitPay , said that while BTC remains the most popular crypto used by its consumers for purchases, accounting for almost 72%, ETH has grown to almost 10%.
“They both have a strong perception of fast, secure and modern digital assets. And both work very well as a payment option, “said Zielke, who also noted that” unfortunately, both have high rates during peak periods. “
Furthermore, Bitcoin has certainly been receiving more institutional interest of late, while interest in ETH is also growing.
MicroStrategy , for example, it adopted BTC as its main treasury reserve because “the technical characteristics of Bitcoin make it an ideal and diversified corporate treasury portfolio,” according to David Shafrir, co-founder and president of GDA Capital , the capital markets branch of the GDA Group. of Companies .
“In the medium term, I believe that BTC will continue to grow as a treasury asset and solidify its position as the most widely used cryptocurrency. On the other hand, I believe that ETH will grow on its boots in the medium term. Use cases for ETH will continue to expand, driven by the NFT market for one, “added Feroz.
And DeFi is changing the game, too.
“More recently, institutional investors are increasingly leaning towards Ethereum, primarily to participate in applications. [DeFi], such as “yield agriculture”, [y] some institutional whale portfolios now dominate the equity funds of many of these platforms, “Shafrir said.
DeFi leverages smart contracts that automatically execute code that resides on blockchains, primarily Ethereum. So as individual wallet metrics continue to improve, new money continues to enter the DeFi market of funds, trading firms and centralized performance platforms “that are providing most of the liquidity.”
New applications are constantly being built on Ethereum, causing traditional financial markets to become “much more sophisticated in their understanding of the potential of cryptocurrencies as an asset class,” Shafrir said, adding that you just need to look at the amount. of bridges being built. to Ethereum from other blockchain platforms, such as Corda.
And speaking of bridges, DeFi could become one of those. But some wonder what role BTC will play in DeFi.
According to William Zielke, the rapidly evolving DeFi space “effectively brings bitcoin to the Ethereum network,” thus providing blockchain merchants with a bridge to Ethereum while maintaining exposure to BTC.
“As such, the combo represents a strong threat to traditional banking and financial services. We believe that decentralized financial services are the future, ”said Zielke.
Bitcoin is the original DeFi application, said David Shafrir, but “the DeFi sector, as propagated by the Ethereum network, has very little use for BTC at the moment,” given that BTC on Ethereum cannot be used directly, but must be converted to an ERC-20 token, or “wrapped.”
To do that, the original bitcoin is locked into a third-party smart contract. Therefore, while users can use their BTC to generate passive income, the bitcoin bridges involved can bring a number of risk factors to one’s capital, including theft by the protocol offered by the wrapper, “which de somehow defeats the point of DeFi, “Shafrir said. , adding that “In the long term, DeFi will completely change the structure of the financial system. It’s doubtful that bitcoin plays a major role in that. “
All that said, what these assets possess is the power to decentralize money and apps, said Matthew Gundrum.
“In this way, humanity can work together to create a better world together without the suffocating grip of centralized control,” he added.
Also, according to Zeeshan Feroz, we should look for “the opportunity beyond ‘which platform will be dominant’ because, in the grand scheme of things, that doesn’t really matter.”
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